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Earned Value? Huh?

 

Like any worthwhile system or process, the underlying concepts are sound, but implementation is everything. Unfortunately, Earned Value (EV) has gained a reputation as too difficult & administratively burdensome, so a common misconception is that only the largest & riskiest programs should ever implement EV. 

So what is EV? Here is a basic introduction.

EV is a program management methodology for objectively tracking cost, schedule, & technical performance that must answer these questions:

Before Starting the Work:
  • What are we doing?
  • Who will do it?
  • When will we do it?
  • How much will it cost?
  • What are our technical, schedule, resource, cost, & management risks?
  • Note: Once we agree on the above & concur to move forward, we "snap a baseline" (take a snapshot of the work, budget, & schedule).

Once Work has Started:
  • How much have we actually done so far?
  • How much have we actually started, finished, & how much is in process?
  • How much has it cost so far?
  • Are we underrun or overrun to date? How much?
  • Are we ahead or behind schedule to date? How much?
  • How much will it cost from here on out?
  • When will we finish?
  • How much will it cost when we finish?
  • Will we finish underrun or overrun? How much?
  • Will we finish early or late? How much?
  • If we are overrun or late, what is the root cause, what is the impact, & what are we doing about it?   

As Things Change:
  • Repeat: What are our technical, schedule, resource, cost, & management risks (or opportunities)? 
  • Do we need to mitigate the risks or capture opportunities by adding or revising incomplete work?
  • Do we need to add, delete, or revise some work? 
  • If so, do these changes affect the 1) baseline for remaining work and/or 2) the forecast for remaining work?

Okay, so you are thinking that if that's EV, then it sounds like basic program management. So, then why do folks say it's so difficult & administratively burdensome?

The hard truth is that program management is difficult. Program management takes skilled people; documented and sometimes rigorous processes; and tools for collecting, reporting, and analyzing management data.

Once you understand EV as stated above, the real question becomes, which of those questions can you ignore and still expect to successfully manage your program?